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S&P 500 High Dividend ETF: A Good Starter Fund

Published Thu, 21 Mar 2019 11:55:35 -0400 on Seeking Alpha

It is no secret that I am a fan of dividend-paying stocks. In my article published back in 2016, I discussed how a dividend-rich investment approach has (perhaps counterintuitively, given the more conservative nature of the strategy) produced superior results compared to the S&P 500 index (SPY) over a multi-decade period.

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Fast-forward a couple of years, and it looks like high-yield stocks still have been holding up very well against the broad market.
As the chart and table below depict, the SPDR Portfolio S&P 500 High Dividend ETF (SPYD) (a fund that tracks the performance of 80 high-yield companies within the S&P 500, equally weighted and rebalanced semi-annually) has inched ahead of the broad market in risk-adjusted terms since the end of 2015. In what pertains to the downside, SPYD produced an average daily return of -3.2% on the three worst days of the period against the S&P 500's more painful -3.8%, which I find intriguing.
Maybe even more curiously, the absolute outperformance of high-yielding dividend stocks seems to have been most pronounced during the bull years of 2016 and 2017, when one might have expected a more aggressive basket of lower-yielding stocks to generate richer returns.

Source: DM Martins Research, using data from Yahoo Finance
The "high yield" component of SPYD's performance depicted above proved to be crucial over the two-and-a-half-month period. Once dividend payments are stripped from the... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
SPDR S&P 500 ETF 298.83   0.0 0.00 5.42 1.81

SPDR S&P 500 ETF - SPY  

Older articles featuring Spdr S&p 500 Etf (SPY):
Lower Yields Are Center Stage
Dividends Defy Expectations
Weekly Review: High-Yield CEFs - BGH Announced Its Monthly Dividend For July 2019 Of $0.1482 Per Share
The Fed And The Yield Curve
The Inverted Yield Curve Is About To Revert
7 Ways To Beat Market: Dividend Growth Update
SPYD: For High Dividend Investors
Q2 2019 Dividend Futures Vs. S&P 500 Dividends
Weekly Review: High-Yield CEFs - A Slight Decrease In The First Week Of July
Investing Is About Total Return And Not Just Yield